Levelling up remains a key issue despite the current economic issues we are experiencing. While fiscal requirements may prompt a moving of the goalposts, levelling up remains a crucial need. The impact of the current cost-of-living crisis is something we’ll feel again and again if we don’t address the fundamentals of levelling up now. Businesses outside of London and the Southeast continue to struggle to access the finance they need to help them grow and opportunities to create more employment and wealth are missed.
Obtaining funding from government sources and high-street banks is more difficult than it ought to be. In September 2022, for example, the government announced that ‘Start Up Loans’ of £25,000 were being made available to businesses that have been trading for up to three years, to help encourage entrepreneurship and innovation. However, I personally have seen little detail on how to go about accessing this funding or where even to seek out further information. The way that the government signposts these opportunities requires serious improvement.
Should businesses be fortunate enough to uncover the details about how to take advantage of these opportunities, they often find that acquiring the funding is too tedious and time-consuming a process. The entire accessibility route needs to be reviewed.
To highlight one example of how the government has fallen short on levelling up, battery start-up Britishvolt was left facing administration after the government rejected a £30 million advance in funding and it had to scramble for alternative funding to survive. Staggeringly, this came after ministers had committed a total of £100 million in backing to the project. The venture will deliver an electric vehicle battery factory in Northumberland which will create 3,000 new jobs. While its short-to medium-term future is secure for now, doubt remains over whether it will materialise.
Since it is an obvious issue that levelling up promises are not aligning with the reality of what is being delivered, private industry has been left with little alternative but to create new vehicles for raising and distributing capital to enable businesses to grow and thrive.
For example, financiers Regionally and Taurus Asset Finance are joining forces to launch a new fund that will inject cash into businesses and regions across the UK. The fund’s targets are those companies that struggle to access funding because they are not based in London or the Southeast.
By connecting investors with some of the innovative and profitable opportunities across the country that may otherwise be overlooked, regional companies will be able to grow and succeed which will help eliminate regional and investment disparity. I am proud to be helping to facilitate the delivery of this fund in the Northwest of England to help complement the Levelling Up agenda and fill some of the gaps left by the shortcomings of the Levelling Up Fund and capital provided by high-street banks.
While the Regionally Levelling Up Fund proposal will be unable to provide finance to the same level as the Levelling Up agenda itself, it will have the capacity to provide typical investments of between £500,000 and £1 million with the potential for follow on investment if appropriate.
The government can learn much from how private investors are working to make a positive difference and tackle the longstanding London-centric mentality that exists here in the UK.
Businesses can be successful in this country no matter where they are, and being located away from the financial centre of the Southeast can be advantageous rather than a hindrance. Ministers would do well to take note.
Key Points:
• Despite government promises, the Levelling Up agenda is falling short outside of London and the Southeast.
• It remains too difficult for businesses, especially those outside the capital, to access funding and support.
• With the government failing on levelling up, private investors are having to step in and pick up the pieces to help businesses grow.
This article originally appeared in The Leaders Council’s special report on ‘The Levelling Up agenda’, published on November 30, 2022. Read the full special report here.
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